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Customers Restricting My Income?


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  #1  
Old 01-27-2012, 11:12 AM
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Default Customers Restricting My Income?

Last year was my first year in the yard care business. It was awesome to see how quickly I could go from not having a single client to getting my name thrown around left and right until I was busier than I could imagine. Now that winter is in full effect, things have definitely slowed down but I have high hopes for spring time.

My problem is this, I found that most of the people in the area I service are either low income, elderly, or they have property but have the equipment to maintain it themselves. The people who maintain their own property are not my biggest struggle. I saw last year that people I thought I wouldn't get work out of had jobs that they would rather not do, so they called me. It's the ones that are on a TIGHT budget that get to me.

I am the type of person that would try to help someone out no matter what, so then add in me trying to take care of a customer and you've got low profits... The thing I am contending with is out of work people who are driving around with a lawn mower and a weed eater and charging $10/hr to do the same services I offer. (I have to say that I give them props for not just sitting on their butts collecting unemployment, but common guys...)

I do have more equipment than most of them and can tackle jobs that they can't. I literally told a potential customer who happened to be a widowed elderly woman that I would do a basic maintenance on her yard for $15 (I was only charging $15/hr last year because of competition) which included mowing, edging and blowing walks and drive. It would probably take about 45 minutes but I have a one hour minimum charge. I thought at $15 I was doing her a favor and still not losing money. However, she said this was too high and that she had someone do it for half. needless to say, she will not be my customer until she changes her mind...

So what the heck do I do??????? I mean don't get me wrong, I get the occasional "wow, that is an awesome deal" every once in a while but most of the time asking for money is like pulling teeth. The thing they need to understand is that by paying some guy $10/hr to mow your yard typically means you will have some new guy there every year who has to learn everything about you as a customer as well as your property. Most those guys don't stick around very long (Meth is HUGE out here and most of them make enough to get their fix and you'll never see them again) or they can pay a little more and have a reliable company take care of them year after year.

I guess it's just one of those things that my business will hopefully outgrow. I just don't want to get caught in low balling as I don't want to spend the rest of my life being able to pay the bills with little money to get me through the winter. So how do i convince my customers that it is worth paying more for a company who will stick with them?

The two main guys doing yard care in my area both do the work themselves with no employees. They charge $20/hr and $25/hr. I will be charing $20/hr this year as I feel much more knowledgeable and experienced as opposed to last year. Not having many customers makes me want to take EVERY job but would I be better off refusing the jobs that I will break even on or make a tiny profit or are they worth it to make a customer happy and encourage referrals? I guess you wouldn't want the customer telling everyone how dirt cheap you did their yard though...

I don't know guys, a little friendly advice would go far. I guess I'm just getting discouraged with it being winter and me spending to much time sitting and not enough time making money. Thanks for anyone's response!
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  #2  
Old 01-27-2012, 11:32 AM
TiedemanLLC TiedemanLLC is offline
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Wow, I thought I had it bad with prices in my area, $20 to $25 is an hour is extremely low. The low guys in our area is around $50.

You first really need to figure out what your costs are, and what your break even is. Then what you want your profit margin to be.

There are many different ways you can sell your service though and get that extra buck.

1) you support the local community
2) you have insurance, while the others don't. So if they get hurt on the clients property the client could have to foot the bill
3) Whether you have any certification or training in your field
4) You are reliable, and not going to be here on year and gone the next

Those are just four that I named off my head. I know if I took some time I could come up with lots more. I would personally start out with the insurance first. Perhaps have a type of information sheet or flyer to give to potential clients telling them "You're liable if someone gets hurt on your property, and they don't have insurance" Something along those lines.
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Old 01-27-2012, 12:20 PM
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$35-$75 an hour (depending on equipment) here. I try to be between $50 & $75 depending on what type of work I am doing. Do not try to compete on price - someone is always willing to do it cheaper. Offer higher end or niche services other guys are not offering. Emphasize the quality, reliability & knowledge of the work that you do. Market to the people that you think can afford your services.
Don't be afraid to drop low profit or PITA customers.
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Old 01-27-2012, 04:21 PM
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Quote:
It was awesome to see how quickly I could go from not having a single client to getting my name thrown around left and right until I was busier than I could imagine.
Can you describe the type of customer that was keeping you so busy? Can you target them for your spring services? I would figure if you could be busy last year, you should be able to repeat that again this year.

Are there different socio-economic areas in your town? Are there richer areas and poorer areas? Can you target more of the well off areas where the customers aren't too concerned with price and want a quality job?

Poorer customers are always going to want as cheap as they can get service and you most likely won't change their mind but you can change who you market too and who your ideal customer is.
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Old 01-27-2012, 05:12 PM
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You are following in my footsteps my friend!


If there was one thing I had learned, it's that people will lie in order to get a better deal than you had already offered them. It's sickening how true it is.

In a nutshell, what you are dealing with, are clients who attempt to size you up to see what they can get away with. They will do whatever it takes to use you by playing 'dumb'. They totally understand the reason behind your pricing, but they will refuse to let you know that.

You are right when you say it's usually the elderly, or those with low income.
(or even those of a certain religion I dare not say).

When this happened to me during the early stage of my business, I would continue being the nice guy and try to please them. Now I take offence, considering how much trouble these type of people have caused me.

It took me awhile to build up the attitude I have today. I went from;

"Alright. I will knock off a few dollars"
This starts a downward spiral of the client requesting all sorts of favors and discounts, very tricky to get out of.

to

"No way. Personally, working for any less than what I offered doesn't interest me"
Sure they can get a taste of my nasty attitude, but sometimes they learn to respect me more, weird I know. I believe it has something to do with being more dominant than your client, give them the impression that you don't NEED them, and it's their loss if they decide not to hire you.

You will sleep better at night knowing you didn't screw yourself over, I know how it feels to go home knowing I just let someone use me.


One final note: Your generosity will kill you. It opens up Pandora's box.

*****************************

As for pricing, it's more of a headache. My area has so much competition the price went from $27.50 to $17.50 per visit. No company charges more than that down here, whoever does will NOT get any business. It's very difficult.

A lot of my competition are all meth heads too, strange... I'm starting to think you are me from the past, I'm pretty sure I wrote word for word what you have written! LOL

******************************

I have turned into a pretty bad guy when it comes caring about my clients. I get treated pretty poorly by many, so in return I eventually 'cracked'. I have no problem letting the client know that I think they are stupid, by using sarcasm. It helps.

I went as far as to tell a client, "I can see that you are speaking out of your *** right now".

Answering their phone calls if I know I did my job, aint gonna happen. I don't respect them enough, business or not - it's working for me!

******************************

Picking up business is difficult in our shared situation. I would suggest taking whoever will go for your price, but don't give them any chances like I had done.

I don't give chances anymore and they end up begging me to take them back in the end once I drop them, and I still keep all of the clients they had gotten me. If they ask, I just say, "I couldn't trust him, he was giving me a hard time", end of story.


I hope this was helpful. My advice isn't perfect, I tend to move from extreme to extreme. Just thought I'd share my experiences with you.


ONE last thing. You are not alone. In the beginning all my clients were against me, and they nearly convinced me that I'm not 'fair'. The truth is, if a client pays me, he/she will receive proper service. Apparently to clients, being unfair is not letting them take a year to pay me for work I have done.

Last edited by CHEESE2009; 01-27-2012 at 05:22 PM.
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Old 01-27-2012, 05:19 PM
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Most of my customers have been elderly. I began working for a customer who lives in a local senior community. As neighbors passed by, seeing what a great job I was doing in her yard, they would often stop to talk for a moment. This is where my natural salesman instinct kicked in I would typically get a job out of them just by taking a moment to answer a few short questions. Once I did a job for them, they became my customers for life. Most of them were blown away by the quality and customer service I provided. More neighbors starting seeing, and more starting calling. Everyone seems to have been burned by someone in the past and like to hear about someone who takes care of their customers. I really took pride in the fact that I was able to help them and make a living at the same time.

I wasn't making a ton by charging only $15/hr but I was able to establish a lasting relationship with my customers. I can count on the fact that come spring time, when everything starts growing again, I will be the person they call. The problem is that with having to purchase and repair equipment, paying for gas to drive around, insurance, signage, ect., it got to be that i was working my tale off and not able to put anything away for a rainy day (or rainy couple of months).

I have had time to think about it and I truly feel that it will pay off. The thing is, most of the seniors I work for have family in town. I started noticing towards the end of the season that I was getting a lot of calls from people who got my number from one of the customers at the senior community. Whether they were family or just someone a little old lady customer talked to at the hairdressers, I started to notice that these people loved to talk about me. I started hearing the things they said and realized that I basically had half a senior community of "proud grandparents" out their talking me up.

This lead me to the idea that I would up my price but keep the $15/hr for seniors. This shows that we care and are willing to help members of our community. I guess the best bet is to try to sell bids instead of hours. This last year taught me a lot as far as how long a job takes and being able to judge the overall scope of work.

My next concern is simply going to be trying to keep up. At my busiest I was crazy last year. There will be no way I will be able start back all the accounts from last year and still take on more without hiring someone. I always wondered why the other two main guys in town never hired anyone. It seems like you would have to turn down business. Who would want to do that?...
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Old 01-27-2012, 05:37 PM
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Thanks Cheese, that was definitely some helpful information. Funny stuff man. I guess I'm just stuck in that fear that I won't find other customers. If I charge this guy to much and he says no, I may not make anything that day instead.

Kinda a tough one. I think I'll take your advice as far as growing a pair for sure. That's one thing i've never accepted is a lack of respect. I literally give respect to anyone I meet, until they do something to change my mind. I try to deal with the "customer is always right" philosophy. I just need to make sure that when it comes to price, I have the final say. If they don't agree on the price, they're not your customer (which means they're wrong)...

Anyways, thanks to everyone who commented. I appreciate any help in the matter. I am 26 and am feeling a little behind. Some of you probably started in high school. Here's to many more years to come!
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Old 01-27-2012, 09:47 PM
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There is NOTHING wrong with someone trying to get a better price on your services. We all have tried to get a cheaper price on a car or a service. We shop around for cheaper food....there is not ONE single person that does not want a deal.

Offer quality, and do not look at a customer that is trying to haggle as a cheapskate. They're just trying to save a buck just like everyone else in the world. YOUR job is a salesman, explain why you are worth the extra money, explain what you do to make sure the money they spend for you is worth it. Explain that the 5 extra bucks goes to insurance, licensing or simply to the extra 10 mins you spend to make sure things are right.
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Old 01-27-2012, 10:32 PM
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Keep in mind that there are only so many hours in a day and if you spend all of your time doing good work at "discount" rates, you will not profit.
Good work takes time and you shouldn't shortchange yourself.

Last year was my first full season at this and I gave a lot of people good prices because I didn't know any better. This season I will be trying to fill any open slots with jobs that pay more that those I already have from last season.
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Old 01-27-2012, 11:27 PM
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at those prices you cant afford something to break. I rather keep my equipment running then barely get by working it. I would set prices and stick to them. Youll lose some but make up for it with profit from others.

Only give a discount if the customer is on the same street as one you service. You can even sell it like that. Tell the person youll knock $5 off if a neighbor signs up.
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